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Scheme Targeted Funds of the Dead

The bookkeeper for a city office tasked with protecting the assets of people who die without wills was charged Friday in an alleged three-year scheme to skim $2.6 million from estates.

Prosecutors and city investigators said
Richard Paul,
34 years old, used his extensive access in the Brooklyn Public Administrator's office to forge checks meant for the Department of Finance, which holds the money until heirs can be located.

Investigators allege that the duplicate checks were deposited by associates—including another city employee—and later used for purchases at supermarkets and restaurants, a travel agency, a Gucci store and an
Apple
store.

Mr. Paul and three others pleaded not guilty in a Manhattan courtroom. An attorney for Mr. Paul said his client believed that someone else used his login information and password to gain access to the office's computer system.

"If he wanted to steal something, I don't think he'd leave his name on it," said attorney
Louis Rosenthal.
"Somebody stole this money, but it wasn't him."

Also charged were
Taryn Miller,
33, who was accused of "helping Paul to facilitate the scheme and receiving stolen funds," prosecutors said.

Ms. Miller's husband,
George Bethea,
34, and
Ransel Sangster,
35, a probationary city corrections officer who has since been suspended from a position at the Department of Homeless Services, face lesser larceny charges.

An attorney for Mr. Bethea declined to comment, and attorneys for Ms. Miller and Mr. Sangster didn't respond to requests for comment.

Mr. Rosenthal said he didn't believe Mr. Paul knew the other defendants, though city investigators said in a report that records, including Facebook postings, showed there were various social and financial links between the four people.

The investigation implicated some individuals not named Friday by prosecutors, who said their probe is continuing. Authorities wouldn't say how many estates were involved in the alleged scheme.

Each borough has a public administrator's office to locate heirs of those who die without wills and distribute the assets. In the past, the offices sometimes have come under scrutiny for allegedly assigning cases to politically connected attorneys who charge excessive fees, draining the estate's value without establishing heirs.

That isn't alleged in this instance. In the case of Mr. Paul, Kings County Public Administrator
Bruce Stein
became suspicious in late December when he reviewed a list of payments made to the Finance Department, according to the city Department of Investigation, which probed the alleged crime along with the office of Manhattan District Attorney
Cyrus Vance Jr.

The payments included a $650,000 check issued to a beneficiary whose name Mr. Stein didn't recognize, and on which his signature had been forged, DOI said.

A subsequent investigation showed that seven such fraudulent checks had been created over three years, dating to August 2008. The scheme was aided, DOI investigators said, by a lack of oversight.